Aim survey: business confidence rising amid evidence of green shoots

5th February 2010

Almost 9 in 10 (86%) of UK-based, Aim-listed companies are positive about the outlook for their own business in the year ahead, according to new independent research. This is a marked increase since last year when only 51% were confident about the next 12 months. Moreover, only 1% of respondents are negative in their outlook, which is a large improvement since last year when 21% were unconfident about the coming year.

Similarly, respondents show increasing confidence in their business sectors. This year almost 7 in 10 (68%) are positive about in the prospects for their particular sector, whereas the equivalent figure for last year was just 3 in 10 (30%).

”Whilst there have been encouraging indications that a degree of economic stability has returned in the wake of the credit crisis and therefore economic recovery is anticipated to follow, there still remains some caution with regards to the speed and timing of a sustainable recovery”, said Dr Azhic Basirov, Head of Capital Markets at Smith & Williamson, the accountancy and financial services group.

These figures come from the 4^th annual Smith & Williamson survey of UK-based, Aim-listed companies. 142 companies took part this year, representing 18% of Aim-listed companies operating in the UK and a wide range of market capitalisation values, length of time on Aim and proportion of shares in public hands.  

Further evidence demonstrating the beginning of green shoots includes:

• More than a third of respondents (35%) are recruiting more staff, which compares very well to last year when 54% were considering making redundancies.
• 7 in 10 (70%) respondents are considering making an acquisition compared to 65% last year. While 4 in 10 (40%) anticipate making an acquisition within the next year, 30% appear to wish to monitor the markets and not make a move for 12 months.
• Almost 7 in 10 (66%) are considering further fundraising and 6 in 10 (60%) of those considering further fundraising anticipate doing this in the year.
• 20% are considering moving to the Full List, whereas only 11% were considering this last year.
• Only 6% of companies are considering delisting in the next year. This is a marked improvement from last year when 15% thought they would de-list within a year.

“In 2009 there were 36 new issues on Aim, a historic low, raising £740 million of capital. By contrast secondary fundraisings by existing Aim companies were popular and raised around £4.8 billion, proof of Aim’s ability to deliver further capital to its existing members,” continued Azhic.

“Since the last quarter of 2009, we have been witnessing a renewed level of interest from a wide range of companies wishing to list on Aim. With credit markets settling down and  improving investor sentiment, we expect the IPO activity level on Aim to increase and remain at a higher sustainable level going forward.”

For further information, contact:

Dr Azhic Basirov on 020 7131 4294

Email Dr Azhic Basirov

PR enquiries to:

Jess Koslow/ Kate Harrison 020 7131 4264/ 4228

About the survey

There were 142 respondents to Smith & Williamson’s 4^th annual Aim survey, representing a wide range of market capitalisations, proportions of shares in public hands and length of time on Aim.

Market capitalisation

<£5m	20%
£5m to £25m	50%
£25m to £50m	15%
>£50m	15%

Approximate proportion of shares in public hands

< 20%	12%
20 to 50%	38%
> 50%	50%

Length of time on Aim

< 2 years	7%
2 to 5 years	53%
5 to 10 years	32%
> 10 years	8%

Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Note to editors

Smith & Williamson is an independent professional and financial services group employing around 1,500 people. The group is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices and mid-to-large corporates. The group operates from offices in London, Belfast, Birmingham, Bristol, Dublin, Glasgow, Guildford, Salisbury, Southampton and Worcester.

Smith & Williamson Limited
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International

Smith & Williamson Corporate Finance Limited
Authorised and regulated by the Financial Services Authority
A member of the London Stock Exchange
A member of M&A International